The Chainlink price is attempting to break higher for the second time overnight, and the current momentum implies it may have farther to go.
During the current cryptocurrency crash, LINK was one of the worst losers. It fell -72 percent from a high of $53.00 on May 9th to a low of $15.00 on May 23rd.
Since then, the token has launched a v-shaped recovery, rising to $27.50 after gaining +83 percent in the last three sessions. Although there is still a long way to go, there are indicators that the rebound may not be done yet.
Technical Analysis of Chainlink Prices
We can assess the intensity of the liquidation on May 19th by looking at the 2-hour price chart. The LINKUSD currency pair started the day on a high note, trading above $42.00. It was trading at $20.00 at its lowest point during the sell-off.
The significantly larger trade volume than normal suggests two things. To begin with, a large number of longs had abandoned positions.
Second, on the rebound from the lows, purchasers had bought the dip and chased the price upwards. The price rose +62 from the low to $34.20 as a result of the bargain-hunting frenzy.
Despite this, the rally faded, and the Chainlink price dropped to new lows in a matter of days. The newly issued longs were penalised in the second phase of liquidations.
Stop-loss liquidation was triggered as soon as a LINK fell below $20.00. During the subsequent 25% collapse, the high trading volume was even larger than on the 19th.
This indicates that longs ultimately gave up when the price hit fresh lows for the week.
The market recovered once more, and the surge that followed was far more orderly than the 19th’s knee-jerk reaction. This is a good indicator, as it implies that the upward trend will continue.
The Chainlink price has struggled to break above the 0.382 percent Fibonacci retracement level from the high on May 19th for the last two days. LINK has finally broken through the $26.40 barrier this morning and should now go higher.
The price should now be on pace to hit the 0.50 percent Fibonacci level of $29.90. Between there and the 0.618 percent level at $33.44, I expect strong resistance.
However, if the price reverses and trades below yesterday’s low of $23.70, the optimistic view would be shattered.